I am just an Arrowcreek neighbor, not a FOA member, nor HOA board member. I am not a lawyer and I do not have a business degree. I am not a member of the Club at Arrowcreek. Please read the following facts at your own discretion.
Based on bankruptcy court documents from September and October of 2014, all public record, the FOA did purchase the Arrowcreek Country Club (now known as The Club at Arrowcreek) for $1.972M.
On 9/17/15, the FOA submitted to the Bankruptcy Court a request to approve a settlement agreement between the Washoe County and the FOA, that would reduce the Washoe County debt by about $218K, resulting in a total of about $1.2M debt owed by the FOA. The FOA has already made payments. If the settlement is approved at the hearing scheduled on November 5th, 2015, the FOA would pay the remaining balance of currently $652K in cash within 60 days. [60 Days? Where else have I recently heard 60 days??]
If this settlement with Washoe County is approved, the net purchase price for the golf club that the FOA actually paid is about $1.75M. (S1.972M purchase price minus $218K debt reduction).
The purchase price for 36 holes of the golf course property, without the club house, pump house and about 50 acres, as proposed by the FOA/HOA BOD is $3.3M.
The difference between FOA purchase price for the entire golf club property and assets ($1.75M) and the proposed HOA purchase price ($3.3M) for part of the assets (36 holes) is $1.55 M.
Does this look like the HOA board fulfilled its fiduciary duty and due diligence: to negotiate the lowest possible price for the HOA?
Is the S3.3M proposed purchase price based on or contingent on the most basic and customary steps of due diligence when buying real estate, such as:
an independent appraisal, data on what would be a fair market price,
on an inspection of the property and associated infrastructure: what is the condition/ life expectancy of the irrigation system and turf?
on the results of a complete Environmental Survey Report (ESR)?
Is the $1.55 M: profit for the FOA? That would be against our Articles of Incorporation.
Is the $1.55 M: an attempt to recover losses? Then we would make a poor business decision in buying the 36 holes of golf course.
Is the $1.5 M: a return on investments made? Is it a fair rate of return?
We are to vote within 60 days from the Special HOA meeting on 9/16/15 on the purchase proposal for the golf course property. That gives us a deadline of November 15th, 2015.
By Donna Hahn